Question

Calculate gross profit ratio from the following: Revenue from operations Rs. 1,00,000, Cost of revenue from operations Rs. 80,000 and purchases Rs. 62,500.

Answer 1

Gross profit ratio = (Gross profit)/(Revenue from operations) x 100

Gross profit = Revenue from operations – Cost of revenue from operations

= 2,50,000 – 2,10,000 

= 40,000 

Greater profit ratio = 40,000/2,50,000 x 100 

= 16%